To answer ‘what now’, companies are asking ‘what next’


And rightly so. COVID-19 has already spurred companies to embrace their future far quicker than they would have organically – from agile working and digitalisation, to automation and investment in renewables. If you know where you are going, actions to respond to the crisis today can set you up for the years ahead.

Of course, answering ‘what’s next’ for your business means knowing what’s next for the world; what may have been right for your business BC (Before-COVID) may not be right in the ‘new reality’ that we will soon face. Crystal-balling a post COVID-19 world requires divination of two key questions: when will it happen; and what will it look like? 

This article will try to provide some initial direction on how the (macro) path to this ‘new reality’ will play out. ‘What’s next’ will always be uncertain, but I think there are some universal factors which will point the way to the speed and direction of recovery for any given market.

(Continued) spread of the virus

Firstly, the spread (impact) of COVID-19. I’m not an expert and the data we have is flawed, but there are a couple of facts we know to be true.

It is a singular virus, but its impact varies. It varies for two reasons: actual differences in the spread and fatality of the virus; and data inconsistencies.

Location-specific factors that influence the actual spread and fatality of the virus will, in turn influence the comparative likelihood and extent of second ‘waves’ of outbreaks pre-vaccine – which inform the political response (and subsequent economic recovery). The top five worth watching:

  1. Healthcare system: including number of ventilators, ICU and normal hospital beds per capita, and access to personal protective equipment (PPE). This may be obvious, but it is important: capacity to respond will dictate how ‘high’ the curve can be politically allowed to go in re-opening the economy, before more serious trade-offs are put on the table. While the risk of secondary outbreaks continues, access to ‘civilian’ PPE should be monitored to anticipate the extent of staged re-openings.

  2. Treatments: lower fatality rates can change the political equation – treatment options that are both effective and available within a country or territory will similarly expand the scope and speed of re-opening pre-vaccine. New and repurposed treatments are currently undergoing clinical trials; those already authorised likely face shorter times to mass production if proved effective.

  3. Technology (tracing, testing, and vaccines): current research suggests that the virus is relatively stable in nature – encouraging news for vaccine research. The most advanced contenders are already in clinical development, with human testing to take place this calendar year. While emergency use may be available as soon as early 2021, it will take time for broad scale use: for example, given the novelty of their approach, mRNA-based vaccines have a long road to approvals and mass production.

    In a pre-vaccine world, the political response will be partially dictated by the likelihood and impact of secondary outbreaks. Expanded tracing and testing capacities will help ‘flatten the curve’ for secondary outbreaks, while extensive serological testing means greater certainty about who is immune (at least for now), and who could return to work; for one German town, this is already about 14 percent of their population. Other possible technological solutions (like advanced health screening in airports) that provide further nuance will reduce the need for ‘blunter’ social distancing policies. 

  4. Climate, seasonality and epidemiological factors: it is not a case of stopping the spread of the virus, but evidence suggests that weather can slow transmission to a small degree (i.e. natural flattening of the curve). The virus may also mutate to become less fatal.

  5. Demographics and cultural differences: the only one of these variables more ‘fixed’ in nature, population parameters like age, underlying risk factors (like obesity, hypertension and diabetes), and social structure (i.e. intergenerational interaction) will influence the likely severity of the virus within country and territory boundaries.

Secondly, there are the data inconsistencies. As we all know by now, the case fatality rate can be significantly overinflated by a lack of testing. More accurate information on the basics of the virus (infectious dose, viral load, transmissibility, infection fatality rate etc.) will similarly speed up the lifting of restrictions as it better contextualizes the impact of the virus. For example, Iceland has done the most testing on a per capita basis in the world; a recent study which screened 6 percent of their population suggested that around 50 percent of cases are asymptomatic (i.e. would not be included in the official caseload of most developed countries or territories). Better information influences the equation for the political response.

Political response

This can be called out separately to the spread of the virus, as it is related but may not necessarily be reflective, and is individually worth watching. Three things to think through:

  1. Stages: we are not dealing with a BC and AC (After-COVID) world – recovery will occur in multiple phases. Here we can learn from the literal future – as the epicenter of the virus moves from East to West, we can similarly expect markets to begin opening up. Their successes and failures will dictate the likelihood of others following suit. Expect travel and large-scale gatherings (events, sporting matches) to be last; as high-risk but necessary components, policies around public transport, schools and daycare will likely be the most contentious and influential. Tracing, testing, and vaccines will be key to this - some markets may not completely re-open before a vaccine is widely available.

  2. Political equation: re-opening will be highly politicised; governments will need sufficient political coverage in order to take action. Rightly or wrongly, the political and policy response has nearly entirely been dictated by health experts to date – suggesting that in order to lift restrictions, the health data needs to significantly improve, or the longer-term socioeconomic consequences need to become far more salient to effectively change public opinion (in effect, by outweighing the presumed health outcomes associated with lifting restrictions).

  3. Devolution of powers: fiscal stimulus is largely occurring on national level, but reopening will more likely be iterative and local. Already in many developed areas there has been significant differences in local implementation – for example, regional governments in Italy have refused to apply in part or in full new directives, and US governors have been seeking to coordinate the eventual reopening of the economy.


Of course, this is only part of the puzzle: the resultant economic outlook will be influenced by, but also inform, the above factors. As for the end destination, we are thinking through what the ‘new reality’ looks like for sectors and markets – whether it be the changing nature of work, consumer behavior and demand, or deglobalisation of supply chains. 


Adapted from an original article by Sophie Heading, Expert, Global Geopolitics Lead, Global Clients and Markets, KPMG.